Wild walk. AMC rallies to sell more shares | Business և economics news

A rally by Reddit fuel traders raised AMC shares by about 3,000 percent this year.

From Bloomberg

AMC Entertainment Holdings Inc. is cashing in on its wild fundraiser by selling more shares, a move that could raise hundreds of millions of dollars for a movie theater that only went bankrupt a few months ago.

AMC fell 17% to $ 51.83 after trading fluctuations in the initial market. The company said it plans to sell up to 11.55 million shares at market price to repay the debt and finance future acquisitions. Even at that price, AMC could borrow almost $ 600 million.

“It would be irresponsible for the board և’s management if they did not raise the balance at these levels,” said Greg Taylor, Purpose Investments’ chief investment officer.

The bid for Thursday comes two days after AMC sold 8.5 million shares of $ 230.5 million to Mudrick Capital. The shares were then traded for profit as the New York-based investment firm told customers that AMC shares were overvalued.

The company warns investors that they may see their share diluted, a prospect that helped kill AMC’s previous experience of much higher sales earlier this year, or even lose their entire investment.

“Recently, the market price of our Class A common stock has been extremely volatile, which could lead to significant losses for buyers of our ordinary Class A shares,” AMC said in a statement.

The lawsuit allows the shares to be sold in the market, which, unlike the traditional offer, is that buyers are found in the open market, where retailers thrive. Shares sold under traditional offerings are mostly bought by institutional investors. B. Riley will make the deal.

A fierce rally in AMC shares this year made losers about 3,000%, leaving it with $ 31.3 billion in market capitalization, making it more valuable than half of the S&P 500 index companies.

AMC tried to allow the sale of 500 million new shares earlier this year, but withdrew the plan in April from shareholders worried about a dilution. Still, the company said at the time that it might be possible to reconsider the idea “at some point in the future.”

At the time, the stock was trading for less than $ 12. At today’s prices, such an offer could remove the entire debt burden of the company թող leave billions more to finance AMC’s turnaround.

CreditSights analysts Matt ZLotton and Hunter Martin said in a statement on Thursday that the successful equity offer “would be a major step forward in discrediting AMC’s capital structure in the first place.”

The company “in its findings, first and foremost, states that the proceeds will be used to reduce debt, which is a change in the recent changes, which focused on achievements,” they added.

(Second paragraph opening price updates)
With the help of Catherine Doherty

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